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Volume 11 - Opinions of Counsel SBRPS No. 67

Opinions of Counsel index

United States Government exemption (American Red Cross); Nonprofit organizations exemption (charitable) (American Red Cross) - Real Property Tax Law, §§ 400, 420-a:

Real property owned by the American Red Cross is entitled to exemption from taxation pursuant to section 400 of the Real Property Tax Law, not section 420-a of such law, despite the fact that most charitable organizations receive their exemptions pursuant to section 420-a.

We have received an inquiry concerning the taxable status of real property owned by the American Red Cross. On a particular town’s 2004 assessment roll, the assessor granted the Red Cross an exemption pursuant to section 420-a of the Real Property Tax Law. Property entitled to exemption under section 420-a is also exempt from most, but not all, special ad valorem levies and special assessments (RPTL, §§ 420-a(8), 490; 7 Op.Counsel SBEA No. 88). The Red Cross has argued that it enjoys sovereign immunity, {1} should receive the exemption granted to United States government-owned property (RPTL, § 400), and not be subject to any special district charges (see, Vol. 4 NYS Assessor’s Manual, § 4.04, p.181.01 et seq. (1/1/95)).

It appears that The American Red Cross (36 USCS § 300101 et seq.) “is not a private voluntary organization but a quasi-official agency of the Federal government” (Op.Atty.Gen. F93-3; see also 1954 Op.Atty.Gen. 202, 1964 Op.Atty.Gen. 32). In Department of Employment v. United States, the United States Supreme Court said:

On the merits, we hold that the Red Cross is an instrumentality of the United States for purposes of immunity from state taxation levied on its operations, and that immunity has not been waived by congressional enactment. Although there is no simple test for ascertaining whether an institution is so closely related to governmental activity as to become a tax-immune instrumentality, the Red Cross is clearly such an instrumentality (385 U.S. 355, 358-59, 87 S.Ct. 464, 467, 17 L.Ed.2d 414, 417-18 (1966)).

The Appellate Division, Fourth Department, cited this decision as well as the 1954 and 1964 Attorney General’s opinions cited above in Greater Buffalo Chapter, American Red Cross v. State Division of Human Rights, 118 A.D.2d 288, 504 N.Y.S.2d 882 (4th Dept., 1986)), and referred to the Red Cross as a Federal instrumentality.

Given the well-known scope of its charitable endeavors, many, and perhaps most, people would likely consider the Red Cross to be a charitable organization, and charitable organizations generally receive their exemptions pursuant to section 420-a of the RPTL. Nevertheless, on the basis of the precedents cited above, in our opinion, real property owned by the American Red Cross is entitled to exemption from taxation pursuant to section 400 of the RPTL, not section 420-a.

January 19, 2005

{1}  We have previously discussed sovereign immunity in conjunction with Federal property (e.g., 10 Op.Counsel SBRPS No. 112) as well as State property (e.g., 8 Op.Counsel SBEA No. 106).